ValueShares, the exchange traded funds unit of registered investment advisory firm Alpha Architect, made its ETF debut today with the launch of the ValueShares U.S. Quantitative Value ETF (BATS: QVAL).
The actively managed QVAL, which charges 0.79% per year, is managed by Dr. Wesley Gray, a U.S. Marine Corps veteran with a Ph.D. from the University of Chicago where studied under Nobel Prize winner, Eugene Fama. QVAL pursues its investment objective by investing primarily in U.S. equity securities the advisor believes to be the cheapest, highest-quality value stocks in the market, according to a statement.
QVAL is currently home to 40 stocks, including well-known names such as Apple (NasdaqGS: AAPL), Coach (NYSE: COH), Cisco Systems (NasdaqGS: CSCO) and Dow component AT&T (NYSE: T).
QVAL joins a small number of concentrated, active, and value-based ETFs currently in the marketplace. QVAL may invest in securities of companies in any industry and with any market capitalization, according to the statement.
“We could have gone the ‘Smart Beta’ route and built a closet-index strategy that holds 100, 200, or more stocks. However, investors are paying us to take active bets; they are not paying us to deliver what is effectively a Vanguard S&P 500 ETF with a small tilt towards some factor,” said Gray in the statement.
It appears that QVAL will get off to a solid start in terms of asset-gathering because, according to the statement, the new ETF’s advisor “anticipates transferring $50 million from its separately managed accounts into the fund.” Alpha Architect, QVAL’s advisor, runs a multi-billion dollar family office and manages separately managed accounts for high-net worth clients.
As of Oct. 16, there had been 155 new product launches in 2014, but just 16 have topped $75 million in assets under management while 11 have crossed $100 million in AUM, according to Morningstar data. [Another Decent Year for New ETFs]
ValueShares also plans to launch an international equivalent of QVAL, the ValueShares International Quantitative ETF, which will trade under the ticker “IVAL.”
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of Apple.